If you're getting ready for retirement, it makes sense to know as much as possible about money management. After all, your income will shift from a regular paycheck to a fixed income consisting of some combination of savings, pension earnings, Social Security benefits and other pieces of your portfolio, such as annuities.

Yet a new study from the American College of Financial Services found that few seniors are considered financially literate. A surprising 89% of women and 72% of men failed a 38-question survey on finances, and only 16% of women felt very knowledgeable about investment considerations for retirement planning.

Educating yourself about money management and your finances in particular is critical to boosting your financial success in retirement. Here we will lay out some of the key elements of financial literacy to help you develop your retirement plans and make the most of your golden years.

The Benefits of Financial Literacy

Becoming financially literate has many benefits for people who are preparing to retire. First, it can help you ensure a secure and fulfilling retirement for yourself, as learning about savings, credit, budgeting and the best retirement investment strategies can equip you to make wiser decisions around managing money on a fixed income. It can also help you understand the details of your investment and financial statements, and can enable you to ask more specific questions when you meet with your financial advisors.

Yet learning about managing your money can also yield benefits that go beyond the financial. For instance, it can have a positive impact on your mental health in retirement, as recent research shows that attending to your finances could help stave off Alzheimer's. According to a recent study from the Financial Industry Regulatory Authority Investor Education Foundation, older people who are confident in their financial knowledge have a lower risk of exhibiting Alzheimer's symptoms. In addition, lower financial confidence is associated with a higher risk of Alzheimer's as well as faster cognitive decline.

The potential benefits of keeping up with your finances are considerable, but what steps can you take to further your financial education?

Financial Literacy 101

Understanding the basics of financial literacy means learning about several aspects of money management, including:

• Bank accounts, such as saving and checking accounts.
• Tax-sheltered and non-tax-sheltered accounts and the investment earnings within them.
• Unsecured credit accounts, such as credit lines, loans and credit card options for seniors.
• Secured credit, such as secured loans (i.e., car loans), home equity lines of credit (HELOCs and HELCs), traditional mortgages, reverse mortgages and secured investment credit lines.
• Company and government pension income.
• Insurance, including health, long-term care, income and life insurance.
• Estate planning.
• Household budgeting, including income and expense tracking.

To become more financially literate, you will need to know how each of these can contribute to your financial situation in retirement. Taking time to familiarize yourself with the details of your finances can also reveal new ways of accomplishing your retirement income goals that might serve you better than your current arrangements do.

How to Become More Financially Literate

Nowadays, it's easier than ever for seniors to boost their financial literacy. You can access free online financial resources, such as those provided by the Center for a Secure Retirement, through your laptop or desktop computer, or you could install a financial literacy app on your smartphone for easy access. You could also look for online classes on financial literacy or retirement offered by colleges or other institutions. Sometimes, a simple YouTube search is all you need to discover great resources.

If you prefer traditional book learning, you could search online for titles that cover the specific aspects of finances that you'd like to learn more about. In-person learning might be a good option as well — evening classes at a local college, seminars at your neighborhood library or even talking with your financial advisor can improve your financial knowledge.

To get you started, here are a few common money management scenarios you might encounter before or during retirement and some advice on how to approach them.

Budgeting and Income Tracking

It's never too late to learn about household budgeting. Even if you haven't previously tracked your regular personal income or expenses, starting now can help you establish good financial habits for your retirement. By doing so, you can gain insight into how your spending matches your new fixed income in retirement.

You can track your income and expenses using an online budgeting tool, a free budgeting app, a paper-based budget spreadsheet or even an envelope system.

Planning for Emergencies

One of the building blocks of a strong financial foundation is planning for emergencies. Unexpected car repairs, medical costs not covered by health insurance, and home or appliance repairs can negatively impact a fixed-income retirement budget if you haven't planned for them.

Experts suggest setting aside an amount of money equal to three to six months of living expenses for emergency savings. From there, you could increase your emergency savings by adding a regular amount as part of your monthly household budgeting.

Calculating Interest and Investment Returns

Do you know how much interest you earn on your savings and retirement investments? It's important to understand where to find this information on your account statements as well as how to calculate your overall portfolio return. However, you also need to translate that percentage calculation into after-tax dollars and cents so you can get a better idea of how well your retirement income will cover your retirement expenses and can make adjustments if needed.

You could use a free online compound interest calculator like the one found at Investor.gov. However, keep in mind that this calculation does not account for taxable income, so you might want to chat with your accountant or financial advisor to help you fine-tune your retirement investment calculations.

Paying Off Debt

Another key component of financial success in retirement is debt management. If you haven't yet paid off your debt, you'll want to understand what impact your current loan, credit line or any other debt payments and interest charges could have on your retirement income and budget.

Keep in mind that, while compounding interest (interest earned on interest) helps build retirement income if you're earning it, it also eats away at that income if you're paying it. Consider talking to your banker or financial advisor about which debt consolidation options would be best suited to your situation.

Financial Planning for Retirement

In an ideal world, retirement savings would begin with your first job, but in reality, it's often challenging to get a head start on saving for retirement.

The first step is to list and review all aspects of your finances, including your banking, savings and credit accounts. Then, create and stick to a household budget that will cover emergency savings and increase your retirement savings over the next few years as you cut expenses. It can be helpful to create a draft retirement budget to get an idea of future income flows as well. You'll also want to become familiar with investment terminology, types of investments and how to calculate your returns using online resources, print books or in-person resources.

Remember that this very site is full of other useful resources that can help you plan for retirement. Even if your retirement is still a few years away, becoming financially literate now means you'll be better equipped to position yourself for financial success before and during your retirement.